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Tax Law
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  • FREE
30 minutes of audio
(+ optional 5 minute online quiz)
Plays on Computer:
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Course Aims:

Having examined the rules relating to 'residence' in a previous podcast, this podcast looks at the related concept of being 'ordinarily resident' in UK taxation. Together, the concepts of residence, ordinary residence and domicile determine how much an individual must pay in tax to HMRC. Determining whether someone is ordinarily UK resident is a notoriously complex process taking in a range of different factors. This difficulty has been exacerbated by the absence of a statutory test, inconclusive guidance from HMRC and a myriad of factually complex cases going back as far as the 19th Century. This podcast aims to examine the case law, established relevant factors and Revenue guidance to break down the concept of ordinary residence into something more manageable. This podcast also looks at some of the statutory modifications made to the tests for both residence and ordinary residence and the position of a taxpayer who is resident in more than one country with a double taxation treaty with the UK Government.

After completing the course you will:
  • Understand the test for 'ordinary residence' in the UK and how that differs from the test of 'residence' discussed in Part 1;
  • Understand how the courts approach the 'settled purpose' test;
  • Understand the position of individuals who cannot volentarily adopt a habitual residence in the UK;
  • Be aware of the case law as to whether someone has made a distinct break with the UK;
  • Be aware of the official HMRC guidance on the meaning of ordinary residence and the extent to which this guidance can be relied upon by the taxpayer;
  • Be aware of the statutory modifications made to the residence and ordinary residence test for both income and capital gains tax;
  • Understand the standard OECD provisions for determining residence where the taxpayer is in a country sharing a double taxation treaty with the UK.
Complex Difficulty: 4 of 5
Case Update
Legal Principles
Sources and References:
  • Shah v Barnet London Borough Council [1983]1 All ER 226 ;
  • Fabio Massimo Genovese v HMRC [2009] SPC 00741;
  • Tuczka v HMRC [2010] UKFTT 53 (TC);
  • UCL v Newman, Times, 8 January 1986;
  • Re Mackenzie [1940] 19 ATC 399;
  • Turberville v HMRC [2010] UKFTT 69 (TC);
  • Income Tax Act 2007 ss 829, 831, 832;
  • Cooper v Cadwalader [1904] 5 TC 101;
  • IRC v Zorab [1926] 1 TC 289;
  • IRC v Combe (1932) 17 TC 405;
  • Levene v IRC [1928] 1 AC 217;
  • Reed v Clark [1985] STC 323;
  • Shepherd v HMRC [2005] SPC 484;
  • Taxation (International & Other Provisions) Act 2010 s18(1)b;
  • Income and Corporation Tax Act 1988 s790;
  • Taxation of Chargable Gains Act 1992 s277.

This is the second of a two part CPDcast mini-series on the meaning of the term 'UK resident' and 'ordinarily UK resident' in the context of an individual's liability to pay UK tax. This second podcast will focus on the test for ordinary residence in the UK and the statutory and double taxation treaty modifications to both the otherwise largely common law based residence and ordinary residence tests.

Podcast added: 21/05/10


Podcast last reviewed: 2011-08-30

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